Are you in trouble and wondering what risks you run if you no longer pay your revolving credit? The credit institution must inform you of the risks incurred according to the Consumer Code. Here are, all the same, some answers:
First step: the formal notice to pay
The legal department of the financial institution to which you are attached will give you notice to pay your installments. This request can be made either by the lending organization through a registered letter with acknowledgment of receipt, or by a bailiff in the form of summons.
In some cases, your bank may use collection companies. They will urge you to pay the amount due. Note that if a person has stood surety for your credit, the bank will call them if you do not respond to the formal notice.
Certain credit organizations can claim the full amount due from the first default if the loan contract so provides in its conditions. Considering that you no longer respect the terms of the contract, the establishment terminates the credit. This is called ” forfeiture of the term “. If it is established, the organization must communicate to you a statement including the detail of the amount remaining due.
Second step: judicial recovery
After formal notice and in the event that no arrangement can be found, the credit institution is able to take you to court to recover all of its due.
Your file is then examined. If no agreement has been reached, a judgment is rendered when a hearing is convened, bringing together you and a representative of the lending organization. If your default is established and the sum due exceeds $ 4,000, your bank will be able to initiate the procedures for recovery of guarantees. However, you have one month to appeal the decision and thus suspend the application of the judgment.
Before coming to judicial recovery, it is preferable to reach an amicable agreement with the lender. You can thus reschedule your debts in order to settle the amount due without arriving at the seizure of your property. Note, however, that according to the Consumer Code, no legal action can be taken against you, beyond a two-year foreclosure period, following the first recorded payment incident. In other words, if the credit institution has not come forward during the foreclosure period to collect its due, you are no longer prosecutable.
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